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A Real Estate Investment Trust (REIT) is an entity that owns or finances income-producing real estate. REITs are like mutual funds. REITs provide all types of investors with regular income streams, diversification and long-term capital appreciation. REITs allow individuals to invest in real-estate properties similar to purchasing a stock of a company and owning units. A REIT combines a pool of money from individuals and institutions to buy real estate. The unit holders of a REIT Scheme earn a share of the income produced through renting or selling of the real estate property without actually having to bear the hassle of buying or managing the property.

REIT Regulatory Framework in Pakistan was introduced by Securities and Exchange Commission of Pakistan (SECP) in January 2008, which was subsequently repealed and replaced by REIT Regulations 2015. These regulations are comprehensive with the principal focus on the protection of interests of general investors in a REIT Scheme. A “REIT Scheme” in Pakistan means a listed closed-end fund registered under Real Estate Investment Trust Regulations 2015. The three types of REIT schemes introduced by SECP in Pakistan are:

Developmental REIT: A Developmental REIT Scheme invests in real estate to develop it for Industrial, Commercial or Residential purposes through construction or refurbishment.

Rental REIT: A Rental REIT Scheme invests in commercial or residential Real Estate to generate rental income.

Hybrid REIT: A RIET Scheme having both a portfolio of buildings for rent and a property for development.

About REITs

REITs in Pakistan

Quarterly Report

Symbol of strength

Table of Contents0204061011121314151617

Scheme’s InformationManagement Company‘s StatementsDirectors’ Review ReportTrustee ReportCondensed Interim Financial Information for the period ended 31 March 2018 Condensed Interim Balance Sheet Condensed Interim Profit and Loss Account (Unaudited) Condensed Interim Statement of Comprehensive Income (Unaudited) Condensed Interim Cash Flow Statement (Unaudited) Condensed Interim Statement of Changes in Unite Holders’ Fund (Unaudited) Notes to the Condensed Interim Financial information (Unaudited)

02 Dolmen City REIT

Management Company Arif Habib Dolmen REIT Management Limited Arif Habib Centre, 23 M.T. Khan Road, Karachi

Board of Directors Mr. Nasim Beg Chairman Mr. Nadeem Riaz Director Mr. Asadullah Khawaja Independent Director Mr. Qamar Hussain Independent Director Mr. Abdus Samad A. Habib Director Mr. Faisal Nadeem Director Mr. Muhammad Ejaz Chief Executive Audit Committee Mr. Qamar Hussain Chairman Mr. Abdus Samad A. Habib Member Mr. Asadullah Khawaja Member

CFO & Company Secretary Mr. Muneer Gader

Trustee Share Registrar Central Depository Company of Pakistan Limited CDC House, 99-B, Block B, S.M.C.H.S, Main Shahra-e-Faisal, Karachi.

Scheme’s Information

03Symbol of strength

Bankers Askari Bank Limited Faysal Bank Limited Habib Bank Limited Habib Metropolitan Bank Limited Meezan Bank Limited United Bank Limited Allied Bank Limited Bank Alfalah Limited Bank Al Habib Limited

External Auditors Deloitte Yousuf Adil Chartered Accountants Cavish Court, A-35, Block 7 & 8, K.C.H.S.U, Shahrah-e-Faisal, Karachi.

Internal Auditors Junaidy Shoaib Asad & Co Chartered Accountants 1/6-P, P.E.C.H.S., Mohtrama Laeeq Begum Road, Off Shahrah-e-Faisal, Karachi.

Legal Advisor Mohsin Tayebaly & Co Corporate Legal Consultants 1st Floor, Dime Centre, BC-4 Block 9, Kehkashan, Clifton, Karachi.

Property Manager Dolmen Real Estate Management (Private) Limited

Property Valuer MYK Associates (Private) Limited

Shariah Advisor Mufti Muhammad Ibrahim Easa

Rating Agency JCR-VIS Credit Rating Company Limited VIS House, 128/C, 25th Lane Off Khayaban-e-Ittehad, Phase VII, DHA, Karachi.

Ratings RMC Rating: AM2 (RMC) REIT Rating: RR1

Registered Office Dolmen City REIT Scheme Arif Habib Centre, 23 M.T. Khan Road, Karachi.

04 Dolmen City REIT

Vision

Management Company’sStatements

To be a knowledge based Real Estate Investment Company which adheres to the highest standards of Integrity, Professionalism and Quality to generate sustainable returns for all stakeholders.

MissionTo build upon our competitive advantage of being the first REIT Management Company of Pakistan by providing customer-centric full scale real estate investment related solutions to a selected group of clientele.

We endeavor to provide solutions that not only contribute to the financial bottom-line for our customers but also help them create a distinct strategic advantage.

ValuesResponsibilityEnergyIntegrityTeamwork

06 Dolmen City REIT

Dear Unit holders of Dolmen City REIT

Directors’ Review Report

On behalf of the Board of Directors of Arif Habib Dolmen REIT Management Limited (RMC),We are pleased to present the Directors’ Review Report of Dolmen City REIT (DCR), for the period ended on 31 March 2018.


Financial and Operational Performance During the period under review, DCR recorded a rental income of PKR 2,263.17 million (PKR 764.93 million for the third quarter) showing an increase of 7.35% over the corresponding period last year. Marketing income was recorded at PKR 144.49 million (PKR 58.53 million for the third quarter) against PKR 108.12 million during the previous corresponding period. Administrative and operating expenses during the period were 16.55% of rental income at PKR 374.61 million. Net Operating Income for the period was recorded at PKR 2,033.04 million (PKR 685.52 million for the third quarter) compared with PKR 1,936.61 million during the corresponding period last year. Profit for the period was recorded at PKR 3,169.72 million, growing by 6.62% from PKR 2,973.02 million in the comparative period; DCR is pass through entity for tax purposes and not liable to income tax provided it meets certain conditions. The profit translates into earnings of PKR 1.43 per unit (PKR 0.31 per unit for the third quarter) against PKR 1.34 per unit during the corresponding period last year. The earning per unit of PKR 1.43 per unit comprises of distributable income of PKR 0.92 (PKR 0.88 for the corresponding period) and PKR 0.51 (PKR 0.46 for corresponding period) being un-distributable unrealized fair value gain on investment property.

The occupancy level of DCR’s property is stable on an overall basis and stand at 98.26% by the end of March 2018 (compared with 97.50% at the end of December 2017). The Harbour Front is completely occupied with satisfied tenants and the tenancy pool of Dolmen Mall Clifton has majorly remained the same. Total vacant area in the Mall is 13,987 square feet. During the quarter, some brands and companies such as Fat Burger, Hakka Chine have exited the tenancy pool while Splash, Image amongst others have entered it. Tenants’ satisfaction with the operations and property management at the premises is reflected in their long term agreements and eagerness to occupy further space on availability. As on 31 March 2018, the Weighted Average Lease Expiry ‘WALE’ based on the leasable area of Dolmen City Mall (68% of the total area) is around 3.05 years and of the Harbour Front (32% of the total area) is around 3.36 years (DCR’s current average lease expiry is 3.15 years).

Occupancy level at Dolmen Mall Clifton and Harbour Front at year end is as follows:

Dolmen Mall Clifton

The Harbour Front

Total

Vacant Area

13,987

-

13,987

Dolmen Mall Clifton

The Harbour Front

Total

Leased AreaDecember, 2017

529,642

257,161

786,803

Changes in leased area on a quarter on quarter basis, are as follows:

Leased Area March, 2018

533,675

257,161

790,836

Occupancy

%

97.45%

100%

98.26%

Leased AreaMarch, 2018

533,675

257,161

790,836

Leasable Area

547,662

257,161

804,823

Occupancy Variations

4,033

-

4,033

Occupancy Variations

%

0.76%

-

0.51%

Islamic Finance Excellence AwardDuring March 2018, your REIT management company received appreciation from the Global Forum on Islamic Finance, organized by Center of Islamic Finance-Comsats Lahore, for introducing Shariah compliant REITs in Pakistan and bringing real estate asset class within the reach of small savers. The Forum, as part of their annual distribution of Islamic Finance Excellence Awards, bestowed Dolmen City REIT with ‘Best Islamic REIT in the region’ award, in recognition of outstanding performance since inception.

(in square feet)

(in square feet)

08 Dolmen City REIT

Marketing ActivitiesMarketing and branding activities during the period kept the Mall bustling with healthy footfall of around 2.45 Million during the quarter (average monthly footfall was 816,907 visitors).

The Property Manager played an instrumental role in maintaining the goodwill and brand image of Dolmen City and enticed Karachi’ites to visit, shop and be part of the Dolmen Mall experience. The quarterly Dolmen Magazine kept patrons abreast of shopping festivals, event calendar, brand advertisements and discount offerings. Total 20,000 copies were distributed of the issue to our subscribers, in‐mall distribution, tenants and other patrons.

During the month of February 2018, Dolmen Mall celebrated Lawn season wherein major brands exhibit their latest collections under one umbrella to give customers innovative shopping experience. Screens were placed in the food court for daily screening of Pakistan Super League cricket matches. Daily average footfall during the month was 26,568 visitors.

International Women’s Day: Women’s Day is one of the signature events of Dolmen. It was a 3 day event starting from 8th to 11th March. Women’s Day brought together leading international and local brand discounts and deals, different engaging activities and offers.

The event fortified women entrepreneurs to showcase their exclusive product lines at dolmen bazaar and encouraged them to become active participants in the community. The mall featured brands like L’Oréal, Make up City & Dermalogica. The mall was adorned with flowers and the atrium hosted numerous engaging activities where customers could win amazing giveaways, get personalized sketched and much more. The recorded footfall during the event was 116,025 visitors.

Pakistan Day Celebrations:Dolmen Mall celebrated Pakistan Resolution Day from 23rd to 25th March. The mall adorned itself in patriotically crafted thematic ambience in green and white. Additionally, popular local and international brands at Dolmen Malls joined the #MeriPehchan celebrations by offering 23% discount on their outlets. Dolmen Mall engaged customers in patriotic engagements such as parades, flag hoisting, resolution day quizzes, cultural acts and performances by the cultural artists.

The recorded footfall during the event was 107,115 visitors.

Stocks PerformanceDuring the quarter under review, the stock of ‘DCR’ showed signs of value growth traded on the Pakistan Stock Exchange at an average unit price of PKR 12.33 and touched a high of PKR 13.00 and a low of PKR 10.96 per unit. During the same period KSE100 index moved in the range between 45,560.30 to 40,711.04. In a volatile market, the stock of DCR remained fairly stable with beta of 0.28 (which means for every 1 rupee change in the value of a share in the benchmark; DCR price would likely change by only 28 paisa, beta here represents low volatility and elasticity) and covariance with the market of only 0.26 (which is a measure of the degree to which returns on two risky assets move in tandem, indicate low positive correlation of DCR stock performance with the market performance). Hence, REITs are excellent instruments for accomplishing portfolio diversification and reduced volatility.

Dividend DistributionThe first and second interim cash dividend for FY 17-18 of PKR 0.30 per unit each amounting to PKR 1,334.20 million, which was announced by the Board of RMC in their meeting held on 26 October 2017 and on 09 January 2018, were paid on 05 December 2017 and 16 February 2018 respectively. The dividends distributed so far translate into PKR 0.60 per Unit, providing annualized Dividend Yield equal to 12.00% at par.

Business EnvironmentThe business environment surrounding Dolmen City remains stable. However, it is pivotal that the taxation regime encompassing REITs and real estate sector are made supportive and consistent in the longer term. It is important that REITs are supported at all levels and benefits that are available to REITs in the province of Sindh are extended throughout the country for their proliferation.

The Net Asset Value ‘NAV’ per Unit of DCR is PKR 18.44 at the quarter ended on 31 March 2018 and was PKR 18.44 at the end of second quarter on 31 December 2017 and PKR 18.40 of the corresponding period last year (i.e. 31 March 2018). DCR on its closing Unit price of PKR 12.99 on March 30, 2018 traded at a discount of 29.56% to its NAV.

The introduction of new, quality malls in the country is creating a healthy competition bringing with it benefits of several international brands eyeing Pakistan as their next destination. With professional property management, long lease expiries, extensive marketing activities and renowned tenants, we remain confident that Dolmen City will remain the destination of choice for the visitors, retail operators and corporations alike. This was also confirmed by the DCR Rating reaffirmation for the second year in a row (RR1, highest investment quality) by JCR-VIS Credit Rating Agency in 2017.

OutlookDolmen City REIT is operating above its projected financial trajectory and has remained successful in maintaining occupancy levels and posting rental growth. Consistently healthy footfall and tenants’ contentment with the mall is the testimony of operational success for DCR. Going forward, rental escalations would be the prime revenue driver as the mall is nearing maximum occupancy.

Vigilance at all levels by Trustee, RMC, Shariah Advisor and the SECP ensures compliance to the REIT Regulations and other applicable laws and standards is adhered. These factors continue to provide DCR’s Unit Holders with a rewarding investing experience.

AcknowledgementWe are thankful to DCR’s valued investors, the Securities and Exchange Commission of Pakistan, the management of Pakistan Stock Exchange, the Trustees of DCR, the Property Manager and business partners for their continued cooperation and support. We also appreciate the effort put in by the management team.


Muhammad EjazChief Executive

For and on behalf of the Board

Karachi18 April 2018

10 Dolmen City REIT


Condensed Interim Financial Informationfor the period ended 31 March 2018

Note

Unaudited 31 March

2018

Audited 30 June

2017

(Rupees in ‘000)

ASSETS

Non - current assets Total non - current assets-Investmentproperty 6 39,967,318 38,839,964

Current assets Rentreceivables 7 106,310 91,135Advances,prepaymentsandotherreceivables 8 270,349 258,051Profitaccrued 6,030 25,171Bankbalances 9 1,423,682 3,185,531Total current assets 1,806,371 3,559,888

Total assets 41,773,689 42,399,852

REPRESENTED BY: Unit holders’ fund Issued,subscribedandpaidup (2,223,700,000unitsofRs.10each) 22,237,000 22,237,000

Reserves 18,776,740 19,498,498

Total unit holders’ fund 41,013,740 41,735,498

Liabilities Non - current liabilities FormationcostspayabletoREITmanagementcompany 50,339 105,255Securitydeposits 168,986 88,020Total non - current liabilities 219,325 193,275

Current liabilities PayabletoREITmanagementcompany 10 79,842 78,531Securitydeposits 120,540 140,713Accruedexpensesandotherliabilities 11 340,242 251,835Total current liabilities 540,624 471,079

Total unit holders’ fund and liabilities 41,773,689 42,399,852 (Rupees)

Net assets value per unit 18.44 18.77

CONTINGENCIES AND COMMITMENTS 12

Theannexednotesfrom1to19formanintegralpartofthecondensedinterimfinancialinformation.

Condensed Interim Balance SheetAsat31March2018

12

12 Dolmen City REIT

Chief Executive Officer DirectorChief Financial Officer

Income Rentalincome 2,263,166 2,108,273 764,933 735,524Marketingincome 144,491 108,123 58,533 34,080 2,407,657 2,216,396 823,466 769,604

Administrativeandoperatingexpenses 13 (374,613) (279,785) (137,949) (84,513)Net operating income 2,033,044 1,936,611 685,517 685,091

Otherincome-profitondeposits 89,725 82,808 20,552 30,051 2,122,769 2,019,419 706,069 715,142

Managementfee 10.1 (60,991) (58,098) (20,565) (20,552)SindhSalesTaxonmanagementfee 10.1 (7,929) (7,553) (2,674) (2,672)Trusteeremuneration 11.1 (10,165) (9,683) (3,427) (3,425)SindhSalesTaxontrusteeremuneration 11.1 (1,321) (1,259) (445) (446)ReversalofprovisionforWorkers’ WelfareFund - 3,469 - - (80,406) (73,124) (27,111) (27,095)Profit before change in fair value of investment property 2,042,363 1,946,295 678,958 688,047

Changeinfairvalueofinvestmentproperty 6 1,127,354 1,026,726 - -Profit before taxation 3,169,717 2,973,021 678,958 688,047

Taxation 14 - - - -Profit after taxation for the period 3,169,717 2,973,021 678,958 688,047 (Rupees) Earningsperunit-Distributableincome 0.92 0.88 0.31 0.31Earningsperunit-Undistributableunrealised fairvaluegains 0.51 0.46 - -Earnings per unit - Basic and diluted 16 1.43 1.34 0.31 0.31


Note

Nine months period ended Quarter ended

31 March2018

31 March2017

31 March2018

31 March2017

(Rupees in ‘000)

Condensed Interim Profit and Loss Account (Unaudited)Fortheninemonthsperiodandquarterended31March2018



Profitaftertaxationfortheperiod 3,169,717 2,973,021 678,958 688,047

Othercomprehensiveincome - - - -

Totalcomprehensiveincomefortheperiod 3,169,717 2,973,021 678,958 688,047


Condensed Interim Statement of Comprehensive Income (Unaudited) Fortheninemonthsperiodandquarterended31March2018

14 Dolmen City REIT

Quarter ended

31 March2018

31 March2017

(Rupees in ‘000)

Nine months period ended

31 March2018

31 March2017


(Rupees in ‘000)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax 3,169,717 2,973,021Adjustmentsfor: Changeinfairvalueofinvestmentproperty (1,127,354) (1,026,726)Profitondeposits (89,725) (82,808) 1,952,638 1,863,487Working capital changes Increaseincurrentassets -Rentreceivables (15,175) (45,127)-Advances,prepaymentsandotherreceivables (8,850) (6,156)

Increaseincurrentliabilities -PayabletotheREITmanagementcompany 1,311 2,154-Accruedexpensesandotherliabilities 88,407 18,668Cash generated from operations 2,018,331 1,833,026

Taxespaid (3,448) (3,023)Formationcostspaid-net (54,916) (54,916)Securitydepositsreceived-net 60,793 40,355Net cash generated from operations 2,020,760 1,815,442

CASH FLOWS FROM INVESTING ACTIVITIES Profitondepositsreceived 108,866 122,503Redemptionoftermdepositreceipts - 700,000Net cash generated from investing activities 108,866 822,503

CASH FLOW FROM FINANCING ACTIVITIES Net cash (used in) financing activities - Dividend paid (3,891,475) (2,312,648)

Net(decrease)/increaseincashandcashequivalentsduringtheperiod (1,761,849) 325,297Cashandcashequivalentsatbeginningoftheperiod 3,185,531 2,126,862Cashandcashequivalentsatendoftheperiod 1,423,682 2,452,159


Condensed Interim Cash Flow Statement (Unaudited) Fortheninemonthsperiodended31March2018


Nine months period ended

31 March2018

31 March2017


Balance as at 30 June 2016 22,237,000 281,346 15,421,988 15,703,334 2,320,692 18,024,026 40,261,026

Transactions with owners

Cashdividendfortheyearended 30June2016(Rs.1.04perunit) - - - -(2,312,648) (2,312,648) (2,312,648)

Total comprehensive income for the period - profit for the period - - 1,026,726 1,026,726 1,946,295 2,973,021 2,973,021

Balance as at 31 March 2017 22,237,000 281,346 16,448,714 16,730,060 1,954,339 18,684,399 40,921,399

Balance as at 30 June 2017 22,237,000 281,346 16,602,964 16,884,310 2,614,188 19,498,498 41,735,498

Transactions with owners

Cashdividendfortheyearended 30June2017(Rs.1.15perunit) - - - -(2,557,255) (2,557,255) (2,557,255)Cashdividendfortheperiodended 30September2017(Rs.0.30perunit) - - - - (667,110) (667,110) (667,110)Cashdividendfortheperiodended 31December2017(Rs.0.30perunit) - - - - (667,110) (667,110) (667,110)

Total comprehensive income for the period - profit for the period - - 1,127,354 1,127,354 2,042,363 3,169,717 3,169,717

Balance as at 31 March 2018 22,237,000 281,346 17,730,318 18,011,664 765,076 18,776,740 41,013,740


Condensed Interim Statement of Changes in Unit Holders’ Fund (Unaudited)Fortheninemonthsperiodended31March2018

Units

Premium onissue of

units - net

Fair valuereserve

note 16.1.1

Unappropriat-ed profit

Sub total TotalReserves

Unit holders’ fund

Capital Reserves RevenueReserves

------------------------------------ (Rupees in '000) ------------------------------------

16 Dolmen City REIT


1 STATUS AND NATURE OF BUSINESS

1.1 DolmenCityREIT(theScheme)wasestablishedunderTrustDeed,dated20January2015,executedbetweenArifHabibDolmenREITManagementLimited(AHDRML),astheREITManagementCompany(RMC)andCentralDepositaryCompanyofPakistanLimited(CDCPL),astheTrustee;andisgovernedundertheRealEstateInvestmentTrustRegulations,2015(REITRegulations,2015),promulgatedandamendedfromtimetotimebytheSecuritiesandExchangeCommissionofPakistan(theSECP).

TheTrustDeedoftheSchemewasregisteredon20January2015whereasapprovaloftheregistrationoftheREITSchemehasbeengrantedbytheSECPon29May2015.TheSchemeisaPerpetual,Closed-end,ShariahCompliant,RentalREIT.TheSchemeislistedonPakistanStockExchangeLimited.TheSchemeisrated“RR1”byJCR-VISCreditRatingCompanyLimited.TheregisteredofficeoftheREITManagementCompanyissituatedatArifHabibCenter,23M.T.KhanRoad,Karachi.

1.2 TheSchemeisthesubsidiaryofInternationalComplexProjectsLimited(theICPL).Asat31March2018,ICPLdirectlyholds75percentunitsoftheScheme.

2 BASIS OF PREPARATION

2.1 ThiscondensedinterimfinancialinformationoftheSchemefortheninemonthsperiodended31March2018hasbeenpreparedinaccordancewiththerequirementsoftheInternationalAccountingStandards34 “Interim Financial Reporting” and provisions of and directives issued under the Companies Act,2017,REITRegulations,2015anddirectivesissuedbytheSECP.Incase,whererequirementsdiffer,theprovisionsofordirectivesissuedundertheCompaniesAct,2017,REITRegulations,2015orthedirectivesissuedbytheSECPshallprevail.

ThiscondensedinterimfinancialinformationoftheSchemedoesnotincludealloftheinformationrequiredforannual financialstatementsandshouldberead inconjunctionwiththefinancialstatementsof theSchemeasatandfortheyearended30June2017.However,selectedexplanatorynotesareincludedtoexplaineventsandtransactionsthataresignificanttoanunderstandingofthechangesintheScheme’sfinancialpositionandperformancesincethelastfinancialstatements.

ThiscondensedinterimfinancialinformationisbeingsubmittedtotheunitholdersasrequiredbylistingregulationsofPakistanStockExchangeLimitedvidesection237oftheCompaniesAct,2017.

2.2 Basis of measurement Thiscondensedinterimfinancialinformationhavebeenpreparedonthebasisof‘historicalcostconvention’

exceptinvestmentpropertywhichisstatedonfairvalue.

2.3 Functional and presentation currency

ThiscondensedinterimfinancialinformationispresentedinPakistanRupeeswhichisalsotheScheme’sfunctionalcurrencyandallfinancialinformationpresentedhasbeenroundedofftothenearestthousand,exceptotherwisestated.

3 SIGNIFICANT ACCOUNTING POLICIES

Theaccountingpoliciesandmethodsofcomputationadoptedinthepreparationofthiscondensedinterimfinancialinformationarethesameasthoseappliedinthepreparationoftheannualfinancialstatementsfortheyearended30June2017.

Certainamendmentstoexistingstandardsandinterpretationsbecameeffectiveduringtheperiodwhichareeithernotrelevantornothavingsignificantimpactonthiscondensedinterimfinancialinformation.

Notes to the Condensed Interim Financial information (Unaudited)Fortheninemonthsperiodandquarterended31March2018


4 ACCOUNTING ESTIMATES AND JUDGMENTS

Thepreparationofthecondensedinterimfinancialinformationinconformitywithapprovedaccountingstandards require management to make estimates, assumptions and use judgments that affect theapplicationofpoliciesandreportedamountsofassetsandliabilities,incomeandexpenses.Estimates,assumptions and judgments are continually evaluated and are based on historical experience andotherfactors,includingreasonableexpectationsoffutureevents.Revisionstoaccountingestimatesarerecognizedprospectivelycommencingfromtheperiodofrevision.

In preparing the condensed interim financial information, the significant judgments made by RMC inapplyingtheScheme’saccountingpoliciesandthekeysourcesofestimationuncertaintywerethesameasthosethatappliedtotheprecedingfinancialstatementsoftheSchemeasatandfortheyearended30June2017.

5 RISK MANAGEMENT TheScheme’sriskmanagementobjectivesandpoliciesareconsistentwiththoseobjectivesandpolicies

whichweredisclosedinthefinancialstatementsasatandfortheyearended30June2017.

Unaudited Audited 31 March 30 June Note 2018 2017 (Rupees in ‘000) 6 INVESTMENT PROPERTY Carryingamountatbeginningoftheperiod 38,839,964 37,658,988 Add:Changeinfairvalue-unrealised 1,127,354 1,180,976 Carryingamountatendoftheperiod 6.1 39,967,318 38,839,964 6.1 The Investment property comprise of the buildings named as the “DOLMEN CITY MALL” and the

“HARBOUR FRONT”, comprising of two Basements (460,438 square feet), Ground floor (241,052square feet), Mezzanine Floor (19,879 square feet), First floor (275,399 square feet), Second floor(272,972square feet),PlantandTransformerRooms(27,667square feet),Third toNineteenth floors(270,271squarefeet)i.e.havingatotalcoveredareaof1,567,678squarefeetwith15,201.68squareyardsundividedshareinthePlotbearingNo.HC-3,Block4,KDA,Scheme5,MarineDrive,Karachi.

TheinvestmentpropertyhasbeenvaluedbyMYKAssociates(Private)Limited(‘MYK’or‘theValuer’)asat31December2017and30June2017.TheValuerusedallprescribedapproachestovaluetheinvestmentpropertyaspertheclause7(a)ofScheduleVItotheREITRegulations,2015.Thevaluationsaresummarisedbelow:

31 December 30 June 2017 2017 (Rupees in million)

Cost approach 20,889 20,965 Sales comparison approach 56,345 57,186 Income capitalization approach

(a)Valuer’sassessmentofrentalincome–using7% capitalizationrate 41,112 41,583

(b)OnprojectedNetOperatingIncome(NOI)basedon

existingrentalagreementsandexpectedrentforthe vacantarea–using7%capitalizationrate 39,967 38,839


18 Dolmen City REIT

Theclause7(c)ofScheduleVItotheREITRegulations,2015,statesthattheValuershallprovideanexplanationoftherelativestrengthsandweaknessofvariousapproachesandexplicitlystatetheapproachthatismostappropriatefortheREITScheme.MYKinitsvaluationreporthasstatedthatoutofthreeapproaches identified inREITRegulations,2015“IncomeCapitalizationApproach” isgenerallybasedontheprinciplethatthevalueofpropertyreflectsthequalityandquantityoftheincomeitisexpectedtogenerateover time. It is themost typicalapproachusedfor incomeproducingproperties i.e. rentalproperties.MYKhasdetermined twovaluesunder IncomeCapitalizationApproachas statedabove,howeverrecommendedthattheprojectedNOIbasedonexistingrentalagreementsandexpectedrentforthevacantareaismostappropriatefortheScheme.Accordingly,InvestmentPropertyhasbeenvaluedinthesefinancialstatementsunderIncomecapitalizationapproachbasedonexistingrentalagreementsandexpectedrentforthevacantarea.

Asofthelastvaluationdate,thevaluerassessedtheforcedsalevalueoftheinvestmentpropertytobe

Rs.45.076billion. The fair value measurement for the investment property has been categorised as Level 3 fair value

measurementswhichisconsideredashighestandbestuseofinvestmentproperty.

Significant unobservable inputs Sensitivity Change in Effect on input fair value (Rupees in ‘000)

-Presentrevenue(basedonexitingleasingcontracts) +5% 2,967,093 -Presentrevenue(basedonexitingleasingcontracts) -5% (2,967,093) -Presentoperatingcosts(basedonprojectedcosts) +5% (409,395) -Presentoperatingcosts(basedonprojectedcosts) -5% 409,395 -Capitalizationrate +1% (5,982,349) -Capitalizationrate -1% 5,345,974

Unaudited Audited 31 March 30 June 2018 2017 (Rupees in ‘000)

7 RENT RECEIVABLES

Unsecured

Consideredgood 106,310 91,135 Considereddoubtful 25,669 25,669 131,979 116,804 Less:Provisionfordoubtfulbalances (25,669) (25,669) 106,310 91,135

Selected Notes to the Condensed Interim Financial Statements (Un-Audited)FortheQuarterEndedSeptember30,2015Notes to the Condensed Interim Financial information (Unaudited)Fortheninemonthsperiodandquarterended31March2018


Unaudited Audited 31 March 30 June Note 2018 2017 (Rupees in ‘000) 8 ADVANCES, PREPAYMENTS AND OTHER

RECEIVABLES

Unsecured - Considered good Securitydeposit 944 837

Prepayments 8,743 - Advancetax 260,662 257,214 270,349 258,051 Considered doubtful - unsecured 4,728 4,728 275,077 262,779 Less:Provisionfordoubtfulbalances (4,728) (4,728) 270,349 258,051

9 BANK BALANCES

Termdepositreceipts 9.1 1,100,000 2,502,342 Savingaccounts 9.2 321,196 680,953 Currentaccount 2,486 2,236 1,423,682 3,185,531

9.1 ThisrepresentstermdepositreceiptswithIslamicbankandthiscarryexpectedprofitrateof6.10%(30June2017:5.95%)perannumwithmaturityofthreemonths.

9.2 Theserepresentdepositsheldinribafreesavingaccountscarryingexpectedprofitratesrangingfrom2.05%to5.50%(30June2017:2.05%to5.56%)perannum.

Unaudited Audited 31 March 30 June Note 2018 2017 (Rupees in ‘000)

10 PAYABLE TO REIT MANAGEMENT COMPANY

Managementfeepayable 20,566 19,360 SindhSalesTax 4,360 4,255 10.1 24,926 23,615 Currentportionofformationcosts 54,916 54,916 79,842 78,531

10.1UndertheprovisionsofREITRegulations,2015,RMCisentitledtoamanagementfeenotexceedingthreepercentofNOIoftheScheme.Themanagementfeeispayableonquarterlybasisinarrears.TheSindhGovernmenthasleviedSindhSalesTaxontheremunerationoftheRMCthroughSindhSalesTaxonServicesAct,2011,effectivefrom1July2014.Howevertheratehasbeenreducedfrom14%to13%effectivefrom1July2016.


20 Dolmen City REIT

Unaudited Audited 31 March 30 June Note 2018 2017 (Rupees in ‘000)

11 ACCRUED EXPENSES AND OTHER LIABILITIES

Trusteeremuneration 11.1 11,487 14,588 Provisionforgovernmentlevies 997 4,000 MonitoringfeepayabletoSECP 16,678 22,237 Payabletoassociatedundertakings 33,944 23,065 Unearnedrentalincome 94,482 92,788 Salestaxandwithholdingincometax 46,535 48,719 Charitypayable 2,486 2,486 FederalExciseDuty 11.2 11,980 11,980 Takafulfee - 2,143 Accruedexpensesandotherliabilities 76,126 27,486 Unclaimeddividend 45,527 2,343 340,242 251,835

11.1TheTrusteeisentitledtoaremunerationforservicesrenderedatarateof0.6%oftheNOIundertheprovisionsoftheREITRegulations,2015.However,theTrusteechargedremunerationatarateof0.5%oftheNOIduringtheperiod.TheSindhGovernmentleviedSindhSalesTaxontheremunerationoftheTrusteethroughSindhSalesTaxonServicesAct,2011,effectivefrom1July2015.Howevertheratehasbeenreducedfrom14%to13%effectivefrom1July2016.

11.2Asper the requirementofFinanceAct,2013,FederalExciseDuty (FED)at the rateof16%on the

remunerationoftheRMChasbeenapplied.TheRMCisoftheviewthatsincetheremunerationisalreadysubjecttoprovincialsalestax,furtherlevyofFEDmayresultindoubletaxation,whichdoesnotappeartobethespiritofthelaw.

TheHonorableSindhHighCourt(SHC)throughitsorderdated2June2016,inCPD-3184of2014(andothers)filedbyvarioustaxpayers,hasinteraliadeclaredthatFederalExciseAct,2005(FEDAct)isonservices,otherthanshippingagentsandrelatedservices,isultravirestotheConstitutionfrom01July2011.However,thedeclarationmadebytheSHC,asdirected,willhaveeffectinthemannerprescribedinthejudgment.TheSHCinitsdecisiondated16July2016inrespectofconstitutionalpetitionfiledbymanagementcompaniesofmutualfundsmaintainedthepreviousorderontheFED.

TheSindhRevenueBoardandtheFederalBoardofRevenuehavefiledappealsbeforeSupremeCourtofPakistan(SCP)againsttheSHC’sdecisiondated2June2016,whichispendingfordecision.Witheffectfrom01July2016,FEDonservicesprovidedorrenderedbyNon-BankingFinancialInstitutionsdealinginserviceswhicharesubjecttoprovincialsalestaxhasbeenwithdrawnbyFinanceAct,2016.Therefore,the Scheme has discontinued making the provision in this regard. As a matter of abundant caution,withoutprejudicetotheabove,anaccumulatedprovisionofRs.11.980millionhasbeenmaintainedintheScheme’scondensedinterimfinancialinformation.

12 CONTINGENCIES AND COMMITMENTS

Therewerenocontingenciesandcommitmentsasat31March2018.



13 ADMINISTRATIVE AND OPERATING EXPENSES

Nine months period ended Quarter ended 31 March 31 March 31 March 31 March 2018 2017 2018 2017 (Rupees in ‘000)

SECPMonitoringfee 16,678 16,678 5,559 5,559 Propertymanagementfee 153,240 142,287 48,622 46,344 Ancillaryincomecollectionfee 22,779 17,357 9,277 5,249 Commonareamaintenancecharges 12,058 7,107 3,957 493 Legalandprofessionalcharges 2,818 5,060 1,186 886 Utilityexpenses 694 812 509 272 Marketingexpenses 40,254 35,180 5,977 6,947 Takafulfee 17,797 21,925 5,846 7,228 Propertyandadvertisementtaxes 14,117 7,543 4,572 4,335 Auditors’remuneration 1,654 1,833 418 300 Renovationexpense 87,573 17,329 51,049 3,824 Healthchecksurvey - 3,937 - 2,774 Others 4,951 2,737 977 302 374,613 279,785 137,949 84,513

14 TAXATION

TheScheme’sincomeisexemptfromIncomeTaxasperclause(99)ofpartIoftheSecondScheduletotheIncomeTaxOrdinance,2001,subjecttotheconditionthatnotlessthan90%oftheaccountingincomefortheyearasreducedbycapitalgainswhetherrealisedorunrealisedisdistributedamongsttheunitholders.Providedthatforthepurposeofdeterminingdistributionofnotlessthan90%ofitsaccountingincomefortheyear,theincomedistributedthroughbonusunitsshallnotbetakenintoaccount.

The Board of Directors of the RMC intends to distribute more than ninety percent of the Scheme’saccountingincomefortheyearending30June2018asreducedbycapitalgains(whetherrealisedorunrealised)toitsunitholdersintheformofcashtoavailtheexemption.Accordingly,notaxprovisionhasbeenmadeinthecondensedinterimfinancialinformationfortheperiodended31March2018.

15 TRANSACTIONS AND BALANCES WITH RELATED PARTIES

RelatedpartiesincludeArifHabibDolmenREITManagementLimitedbeingtheManagementCompany,CentralDepositoryCompanyofPakistanLimited,beingtheTrusteetotheScheme,MYKAssociates(Private) Limited being valuer, International Complex Projects Limited being the Holding Company,DolmenRealEstateManagement(Private)Limited,beingpropertymanagerforrentcollection,ancillaryincomecollectionandcommonareamaintenancecharges,connectedperson,associatedcompanies,directorsandkeyexecutivesoftheRMC,trustee,valuerandpromoterofRMC.

TheservicesprovidedunderREITRegulationsor the trustdeedorofferingdocument,by theRMC,Trustee,Valuer,PropertyManagershallnotbedeemedrelatedpartytransaction.

Transactionswithrelatedpartiesare in thenormalcourseofbusiness,atcontractedratesandtermsdeterminedinaccordancewithcommercialrates.

TherearenopotentialconflictsofinterestoftherelatedpartywithrespecttotheScheme.

Detailsofthetransactionswithrelatedpartiesandbalanceswiththem,ifnotdisclosedelsewhereinthesecondensedinterimfinancialinformation,areasfollows:


22 Dolmen City REIT

Nine months period ended 31 March 31 March 2018 2017 (Rupees in ‘000)15.1 Transactions during the period:

International Complex Projects Limited -Rentalincome 30,969 28,154

-Purchaseofequipmentformaintenance 4,009 - -Paymentagainstpurchaseofequipmentformaintenance 204 - Dolmen Real Estate Management (Private) Limited -

Property Manager

-Commonareamaintenancecharges 12,058 7,107 -ExpensesincurredonbehalfofScheme 529 - -ReimbursementofexpensesincurredonbehalfofScheme 734 - Retail Avenue (Private) Limited

-Rentalincome 5,965 5,423 Sindbad Wonderland (Private) Limited

-Rentalincome 20,763 18,876 Summit Bank Limited

-Rentalincome 24,451 21,911

15.2 Amounts outstanding as at period end Unaudited Audited 31 March 30 June 2018 2017 (Rupees in ‘000) International Complex Projects Limited

-Rentreceivable 171 171 -Netpayableinrespectofpurchaseconsiderationof

investmentproperty 1,819 1,819 -Payableagainstpurchaseofequipmentformaintenance 3,804 - Dolmen Real Estate Management (Private) Limited -

Property Manager

-Commonareamaintenancecharges 12,075 - -ExpensespayableincurredonbehalfofScheme 89 - Retail Avenue (Private) Limited

-Rentreceivable 66 668 Sindbad Wonderland (Private) Limited

-Rentreceivable 466 466 Summit Bank Limited

-Rentreceivable 1,136 1,004



16 EARNINGS PER UNIT - BASIC AND DILUTED

Nine months period ended Quarter ended Note 31 March 31March 31 March 31March 2018 2017 2018 2017

Profitaftertaxation 3,169,717 2,973,021 678,958 688,047 (Number of Units)

Weightedaveragenumberof

ordinaryunitsduringtheperiod 2,223,700,0002,223,700,000 2,223,700,000 2,223,700,000

Earningsperunit-Basic anddiluted16.1 1.43 1.34 0.31 0.31

16.1 Earnings per unit comprises as follows:

Distributableincome-earningsperunit 0.92 0.88 0.31 0.31 Undistributableunrealisedfairvaluegains- 0.51 0.46 - - earningsperunit16.1.1 1.43 1.34 0.31 0.31

16.1.1 Under theprovisionsofTrustDeed, theamountavailable fordistributionshallbe totalof incomeandrealisedgainnetoffexpenses.Accordingly,unrealisedfairvaluegainisnotdistributable.

17 FAIR VALUES

Fairvalueisthepricethatwouldbereceivedtosellanassetorpaidtotransferaliabilityinanorderlytransactionbetweenmarketparticipantsatthemeasurementdate.

UnderlyingthedefinitionoffairvalueisthepresumptionthattheSchemeisagoingconcernwithoutanyintentionorrequirementtocurtailmateriallythescaleofitsoperationsortoundertakeatransactiononadverseterms.

Fairvalueofinvestmentpropertyisshownundernoteno.6.

TheSchemehasnotdisclosedthefairvaluesofallfinancialassetsandfinancial liabilities(loansandreceivables), as theseareeither short term innatureor repriceperiodically.Therefore, their carryingamountsarereasonablyapproximationoffairvalue.

18 NON ADJUSTING EVENT AFTER BALANCE SHEET DATE TheBoardofDirectorsoftheRMCintheirmeetingheldon18April2018havedeclaredandapproved

an interimcashdividendfor thequarterended31March2018ofRe.0.30perunitamountingtoRs.667.11million.Thiscondensedinterimfinancialinformationdonotincludetheeffectofabovewhichwillbeaccountedforintheperiodinwhichitisapproved.

19 DATE OF AUTHORISATION FOR ISSUE

ThecondensedinterimfinancialinformationwasauthorisedforissuebytheBoardofDirectorsoftheRMCon18April2018.


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